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Bailment

In Matrix Europe Ltd v Uniserve Holdings Ltd [2009] EWHC 919 (Comm) the Claimant brought a damages claim against Uniserve Holdings in the Commercial Court following the theft of the Claimant’s goods from Uniserve’s warehouse. Uniserve brought a Part 20 claim against the carrier of the goods who had mistakenly delivered the goods to Uniserve’s warehouse. It was agreed by the parties that Uniserve had been the bailee of the goods. The Claimant alleged that Uniserve had failed to exercise reasonable skill and care in relation to the goods on the grounds that Uniserve’s security system was inadequate for a warehouse located as it was in an area of high criminal activity and used for the storage of valuable goods. Uniserve’s Part 20 claim against the carrier argued that there had been a contract between the carrier and Uniserve in relation to the goods agreed on the British International Freight Association (BIFA) Terms. It argued that the BIFA terms had been incorporated either by a prior course of dealing or by implication. The contract between the carrier and Uniserve arose upon Uniserve accepting the goods as a sub-bailee for the carrier which sub-bailment the Claimant had accepted. Uniserve submitted that the security systems at its warehouse complied with good practice and that they had fulfilled their duty as a bailee. The carrier in its defence submitted that as the delivery was unintentional, it was not governed by a contract and thus it could not be said that there was a course of dealing between it and Uniserve resulting in the incorporation of the BIFA terms.

The court found that Uniserve bore the burden of establishing that it had taken all reasonable steps in caring for the goods and that its failure to take reasonable care was not causative of the loss suffered. Uniserve had failed to discharge this burden. If Uniserve had taken reasonable care of the goods they would have been in the carrier’s custody at a more secure location and would not haven been stolen. In the context of a bailment, the bailee will be liable where the evidence shows that the loss might have been prevented had the bailee taken reasonable care of the goods. The court rejected the argument that there was a contract between Uniserve and the carrier. Because there was no contract, the BIFA terms could not be implied. Uniserve could not establish on the evidence that the BIFA terms applied as a result of a prior course of dealings.